6 ms·

Is it AI or just good ol' offshoring? Mix of both? If AI can just make any dev 10-20% more efficient that's a whole lot of jobs no longer needed.

alephnerd 1y ago
Mix of both. You can't justify hiring a new grad for $130K when you can hire top tier mid-career talent in Warsaw, Cluj, or Bangalore for $50-80K and average mid-career talent for $20-40k In fact, companies like Infosys have begun adopting coding copilots en masse to reduce their own new grad hiring by 20%, but increase utilization rates from 70% to 85%. That said, most new grads were not getting substituted by Infosys freshers - they're getting replaced by mid-career H1Bs who were laid off during COVID and returned to the CEE or India Furthermore, a significant number of mid-career Eastern European and Indian engineers, PMs, and managers returned to the old country during the COVID layoffs due to visa status. A lot of those guys were rehired by their old companies to found GCCs abroad. Finally, state and federal governments in India, Poland, Romania, Czechia, etc provide tax incentives that reduce hiring costs by an additional $10-20k in aggregate.
- ty6853 1y ago
  80k in a rural area outside of Bangalore would be an absolute killing. The real hack here is to avail yourself of a digital nomad or engineer yourself an employment visa via some shell company and then live in the 3rd world while crushing the competition via 1st world education and language skills while passport broing somewhere with lax or unenforced visa rules.
  - alephnerd 1y ago
    > while passport broing somewhere with lax or unenforced visa rules There are significant insurance implications on an employer's side when dealing with employees remoting in random countries (first or third world). Also, you as a company cannot avail tax incentives if employees are digital nomads. For example, Czechia gives $20k per employee if you invest a couple million in office space, but conditions it with butts-in-seats.
    - ty6853 1y ago
      B2B. Use an employer of record type setup. You are an employee of a shell in the country you reside, the real 'employer' is just buying a B2B service.
      - alephnerd 1y ago
        That doesn't help with the tax incentives which is a major driver for why you are seeing significant offshoring. Plenty of major tech hubs in CEE and India give 80-100% tax rebates or PLIs to foreign companies opening and hiring locally IF they also mandate RTO in those offices. They tend to recover the cost through income tax and VAT.
        ty6853 1y ago
        At worst your wage would be tax discounted by that margin. You're competing on real cost, all you have to do is operate on a competitive basis against people with similar level of education, skill, and the unfortunately highly valuable 1st world cultural and language integration. Might be racist but that is going to likely overcome the tax savings on some random guy of otherwise similar software skills in India.
        alephnerd 1y ago
        > Might be racist but that is going to likely overcome the tax savings on some random guy of otherwise similar software skills in India The model used by India is the exact same as that used in Romania, Poland, Czechia, Costa Rica, Israel, and other countries. Having a couple digital nomad contractors works fine for small organizations, but once you break the 300+ number, that's when you start seeing the kind of tax optimizations I mentioned above kicking in. > At worst your wage would be tax discounted by that margin. You're competing on real cost That's the point. Wages don't play a significant role inasmuch as the tax optimization. And that's where the issue kicks in at scale.
satvikpendem 1y ago
Mix of neither. Section 174 changes for amortization of R&D expenditures, overhiring during covid, higher Fed rates.
ortusdux 1y ago
A common trend with manufacturing has been to offshore production, mechanize the domestic systems, and then repatriate with a fraction of the staff. Bonus points if you let the government woo you into coming back with tax breaks.
SoftTalker 1y ago
Probably also a bad convergence with an oversupply of entry-level job-seekers. Kids have been flooding into computer science, data science, and other info-tech fields the past few years. Universities have also been constructing easier paths than the traditional Computer Science degree so that more students can enroll and complete a degree. Now they are graduating and there are more people seeking fewer jobs.
bilbo0s 1y ago
It's both. A new grad in Asia with AI access is just as good as a new grad in the US. Only way cheaper in the long run. Where will we get experienced seniors in 20 years? Well first, will we even need theme? Will AI's be able to replace even seniors by that point? I mean, I'd put money on "Yes" to that question. Even if you're thinking "No", I mean the kids we're hiring now in Asia will be that much better in 20 years. And will be fluent with AI technologies and have a facility with them that we can only imagine today. Not only that, the AI's will be 20 years better. I'm not sure that software development is a good long term plan for a young person in the US right now. Just being honest. Better to use what you know about software right now to try to start your own digital service of some kind. Just my 2 cents though. I could be totally off.
entuno 1y ago
Offshoring to people who use AI, and are now much more productive and can produce high-quality written output. If a junior role can be done with ChatGPT and CoPilot, why pay a western salary for it when you can pay someone a fraction of the salary to use the same thing?
- collingreen 1y ago
  Why doesn't that equally mean pay a new grad to use it?
  - bilbo0s 1y ago
    Because a new grad in the US costs more than a new grad in Vietnam, Hyderabad, Uruguay, or Ningbo.
  - entuno 1y ago
    If often does - but it's a new grad in India or Bangladesh or Indonesia or somewhere else that costs a fraction of what a new grad would cost in a western country, and who can be "fired" at with no notice or rights.
- bilbo0s 1y ago
  Most succinct answer to this general concern I've seen in months. It's business. Less dollars paid out for the same LLM content that the managers know the developers will produce in any case. Foolish to pay more for essentially the same LLM response.
  - franktankbank 1y ago
    Ammonia clouds lift all Hindenburgs.
- pksebben 1y ago
  Because eventually you're going to need a senior dev who actually has an understanding of the underlying system, when the one you have retires. The human junior will eventually become that, while it would be foolish to rely on the inevitability of LLMs getting there in time. Of course, this only matters if you give half a rat's ass about whether the company is going to be solvent in a decade. If your management strategy is "pump metrics for bonuses and bail before they notice" then potayto potahto I suppose...
rkozik1989 1y ago
A few years back somebody on Reddit posted a spreadsheet with tech companies that were hiring SWEs at that time, so to try and help my wife who's been hunting since her arrival in the states in October I decided to revisit last week. It was downright demoralizing how many companies (assuming they still existed) were only hiring for positions in Indian or LATAM offices. If I had to put a figure on it I'd say it was greater than 80% of the companies I looked at.
nradov 1y ago
Increasing efficiency doesn't necessarily reduce the number of jobs needed. Like the switch from programming in assembly language to high-level languages increased efficiency more than 20% but the number of developer jobs also greatly increased during that period. The demand for software is effectively infinite so in the past efficiency improvements just meant that more software was built.
- franktankbank 1y ago
  > The demand for software is effectively infinite Extraordinary claims require extraordinary evidence.
  - nradov 1y ago
    There's nothing extraordinary about my claims. It's a simple extrapolation of historical trends going back 70+ years.
    - franktankbank 1y ago
      You are describing an exponential trend which famously do not exist in nature.
      - nradov 1y ago
        I never claimed it was exponential. Closer to linear. Instead of making things up you could just look at the data. https://fred.stlouisfed.org/series/LEU0254477200A https://fred.stlouisfed.org/series/LEU0254477200A
        franktankbank 1y ago
        Huh, somehow disagreeing with me has softened your claim of "infinity". Yes it still goes up but you think that goes on forever? I just don't see it, more and more tech appears as complexity introduced for its own sake not for any sort of service to the end user. Why is that? Building moats around companies, building moats around your own job, none of that serves the end user. Eventually someone comes along to eat your ossified asses lunch. Eventually people check out from the digital world whether through sheer genetics or finally waking up to the blight.

alephnerd 1y ago

Mix of both. You can't justify hiring a new grad for $130K when you can hire top tier mid-career talent in Warsaw, Cluj, or Bangalore for $50-80K and average mid-career talent for $20-40k In fact, companies like Infosys have begun adopting coding copilots en masse to reduce their own new grad hiring by 20%, but increase utilization rates from 70% to 85%. That said, most new grads were not getting substituted by Infosys freshers - they're getting replaced by mid-career H1Bs who were laid off during COVID and returned to the CEE or India Furthermore, a significant number of mid-career Eastern European and Indian engineers, PMs, and managers returned to the old country during the COVID layoffs due to visa status. A lot of those guys were rehired by their old companies to found GCCs abroad. Finally, state and federal governments in India, Poland, Romania, Czechia, etc provide tax incentives that reduce hiring costs by an additional $10-20k in aggregate.

ty6853 1y ago
80k in a rural area outside of Bangalore would be an absolute killing. The real hack here is to avail yourself of a digital nomad or engineer yourself an employment visa via some shell company and then live in the 3rd world while crushing the competition via 1st world education and language skills while passport broing somewhere with lax or unenforced visa rules.
- alephnerd 1y ago
  > while passport broing somewhere with lax or unenforced visa rules There are significant insurance implications on an employer's side when dealing with employees remoting in random countries (first or third world). Also, you as a company cannot avail tax incentives if employees are digital nomads. For example, Czechia gives $20k per employee if you invest a couple million in office space, but conditions it with butts-in-seats.
  - ty6853 1y ago
    B2B. Use an employer of record type setup. You are an employee of a shell in the country you reside, the real 'employer' is just buying a B2B service.
    - alephnerd 1y ago
      That doesn't help with the tax incentives which is a major driver for why you are seeing significant offshoring. Plenty of major tech hubs in CEE and India give 80-100% tax rebates or PLIs to foreign companies opening and hiring locally IF they also mandate RTO in those offices. They tend to recover the cost through income tax and VAT.
      - ty6853 1y ago
        At worst your wage would be tax discounted by that margin. You're competing on real cost, all you have to do is operate on a competitive basis against people with similar level of education, skill, and the unfortunately highly valuable 1st world cultural and language integration. Might be racist but that is going to likely overcome the tax savings on some random guy of otherwise similar software skills in India.
        alephnerd 1y ago
        > Might be racist but that is going to likely overcome the tax savings on some random guy of otherwise similar software skills in India The model used by India is the exact same as that used in Romania, Poland, Czechia, Costa Rica, Israel, and other countries. Having a couple digital nomad contractors works fine for small organizations, but once you break the 300+ number, that's when you start seeing the kind of tax optimizations I mentioned above kicking in. > At worst your wage would be tax discounted by that margin. You're competing on real cost That's the point. Wages don't play a significant role inasmuch as the tax optimization. And that's where the issue kicks in at scale.

satvikpendem 1y ago

Mix of neither. Section 174 changes for amortization of R&D expenditures, overhiring during covid, higher Fed rates.

ortusdux 1y ago

A common trend with manufacturing has been to offshore production, mechanize the domestic systems, and then repatriate with a fraction of the staff. Bonus points if you let the government woo you into coming back with tax breaks.

SoftTalker 1y ago

Probably also a bad convergence with an oversupply of entry-level job-seekers. Kids have been flooding into computer science, data science, and other info-tech fields the past few years. Universities have also been constructing easier paths than the traditional Computer Science degree so that more students can enroll and complete a degree. Now they are graduating and there are more people seeking fewer jobs.

bilbo0s 1y ago

It's both. A new grad in Asia with AI access is just as good as a new grad in the US. Only way cheaper in the long run. Where will we get experienced seniors in 20 years? Well first, will we even need theme? Will AI's be able to replace even seniors by that point? I mean, I'd put money on "Yes" to that question. Even if you're thinking "No", I mean the kids we're hiring now in Asia will be that much better in 20 years. And will be fluent with AI technologies and have a facility with them that we can only imagine today. Not only that, the AI's will be 20 years better. I'm not sure that software development is a good long term plan for a young person in the US right now. Just being honest. Better to use what you know about software right now to try to start your own digital service of some kind. Just my 2 cents though. I could be totally off.

entuno 1y ago

Offshoring to people who use AI, and are now much more productive and can produce high-quality written output. If a junior role can be done with ChatGPT and CoPilot, why pay a western salary for it when you can pay someone a fraction of the salary to use the same thing?

collingreen 1y ago
Why doesn't that equally mean pay a new grad to use it?
- bilbo0s 1y ago
  Because a new grad in the US costs more than a new grad in Vietnam, Hyderabad, Uruguay, or Ningbo.
- entuno 1y ago
  If often does - but it's a new grad in India or Bangladesh or Indonesia or somewhere else that costs a fraction of what a new grad would cost in a western country, and who can be "fired" at with no notice or rights.
bilbo0s 1y ago
Most succinct answer to this general concern I've seen in months. It's business. Less dollars paid out for the same LLM content that the managers know the developers will produce in any case. Foolish to pay more for essentially the same LLM response.
- franktankbank 1y ago
  Ammonia clouds lift all Hindenburgs.
pksebben 1y ago
Because eventually you're going to need a senior dev who actually has an understanding of the underlying system, when the one you have retires. The human junior will eventually become that, while it would be foolish to rely on the inevitability of LLMs getting there in time. Of course, this only matters if you give half a rat's ass about whether the company is going to be solvent in a decade. If your management strategy is "pump metrics for bonuses and bail before they notice" then potayto potahto I suppose...

rkozik1989 1y ago

A few years back somebody on Reddit posted a spreadsheet with tech companies that were hiring SWEs at that time, so to try and help my wife who's been hunting since her arrival in the states in October I decided to revisit last week. It was downright demoralizing how many companies (assuming they still existed) were only hiring for positions in Indian or LATAM offices. If I had to put a figure on it I'd say it was greater than 80% of the companies I looked at.

nradov 1y ago

Increasing efficiency doesn't necessarily reduce the number of jobs needed. Like the switch from programming in assembly language to high-level languages increased efficiency more than 20% but the number of developer jobs also greatly increased during that period. The demand for software is effectively infinite so in the past efficiency improvements just meant that more software was built.

franktankbank 1y ago
> The demand for software is effectively infinite Extraordinary claims require extraordinary evidence.
- nradov 1y ago
  There's nothing extraordinary about my claims. It's a simple extrapolation of historical trends going back 70+ years.
  - franktankbank 1y ago
    You are describing an exponential trend which famously do not exist in nature.
    - nradov 1y ago
      I never claimed it was exponential. Closer to linear. Instead of making things up you could just look at the data. https://fred.stlouisfed.org/series/LEU0254477200A https://fred.stlouisfed.org/series/LEU0254477200A
      - franktankbank 1y ago
        Huh, somehow disagreeing with me has softened your claim of "infinity". Yes it still goes up but you think that goes on forever? I just don't see it, more and more tech appears as complexity introduced for its own sake not for any sort of service to the end user. Why is that? Building moats around companies, building moats around your own job, none of that serves the end user. Eventually someone comes along to eat your ossified asses lunch. Eventually people check out from the digital world whether through sheer genetics or finally waking up to the blight.